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Quest Means Business
Joe Biden's Super Tuesday Victory; Michael Bloomberg Drops Out Of Presidential Race; Italy Closing All Schools Over Outbreak; OPEC Under Pressure As Virus Hits Oil Demand. Aired 3-4p ET
Aired March 04, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:07]
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: An hour to go on Wall Street. Different day for yesterday, there was almost a sharp selloff,
but we've been up throughout the course of the day, perhaps different reasons, which we need to get into. All the major indices are up very
sharply. Those are the markets. These are the reasons why.
This is it. It's called the Biden bounce. Wall Street is breathing a sigh of relief, as the former Vice President pulls ahead of Bernie Sanders. But
why should this be? You'll hear about it at this hour.
The IMF announces billions of dollars to fight coronavirus. You'll hear from the Managing Director in this hour.
And Donald Trump tells the public it's safe to fly after meeting with airline top officials.
Today of course, we're live in the world's financial capital, New York City. It feels like spring. It's a delightful day. It is almost spring.
It's Wednesday, it's March the 4th. I'm Richard Quest, and yes, I mean business.
Good evening, tonight, Joe Biden's Super Tuesday victory seems to have carried over to Wall Street. When a surprise Federal rate cuts failed to
calm the markets, stocks are now running strongly after a dramatic spate of wins for Joe Biden in the Democratic Primaries.
The Dow shot up at the open and has never look back. United Healthcare, which is the second or third largest with the Dow weightings has led the
index. We will explain why.
To the relief of investors, Joe Biden has managed to transform the Democratic presidential race overnight, and it looks enough to break the
streak of heavy losses over coronavirus.
It was one of the biggest and fastest comebacks in modern American political history. Joe Biden stunned by achieving nine State Primary wins
in a matter of hours. It's a victory for his centrist policies and it's a blow to Bernie Sanders, who just days ago appeared to be on the march
towards the Democratic nomination.
All right, Harry Enten is with me. Good to see you, sir.
HARRY ENTEN, CNN POLITICS SENIOR WRITER AND ANALYST: Hello, my friend.
QUEST: And well, you are the guru of all things that happened last night. What did happen?
ENTEN: I tell you, look at this comeback. This is the support that the different candidates got by the time of the voters decision. And take a
look at this, those who decided in the last few days, look at this margin for Joe Biden -- over 30-point margin over Bernie Sanders. Those who
decided before the last few days, Sanders actually won.
And so this is key because it tells you that that South Carolina win really jumped --
QUEST: Hold the line, Mike Bloomberg is speaking. We need to listen to what he says.
MICHAEL BLOOMBERG (D), FORMER PRESIDENTIAL CANDIDATE: ... right here, hiding in plain sight. These past few months have been some of the most
inspiring, certainly in my life and I hope in yours.
In just 100 days, I have been to 73 cities in 27 states all across the country.
[CHEERING AND APPLAUSE]
BLOOMBERG: We've gone from Portland, Maine, all the way to Compton, California, from Detroit, Michigan, down to Jackson, Mississippi. And every
place I went, I listened to Americans of every age, and every race, and every ethnicity and every religion and every identity and orientation.
And I heard about their hopes, and their dreams and their fears and their struggles, and those conversations just affirmed my faith and the work that
our team was doing to defeat Donald Trump and bring our --
[CHEERING AND APPLAUSE]
BLOOMBERG: And bring our country back together and get things done for the American people.
[CHEERING AND APPLAUSE]
BLOOMBERG: Now, today, I want to say how grateful I am to everyone who has been part of our team, and I want to thank you all from the bottom of my
heart for your support, your work and your votes.
And I'm just telling you, the American public should be saying thank you to you as well. You really made history, you really did.
No -- yes, that's true. No campaign has ever accomplished as much as you did in such a short period of time.
If you go back, we started at one percent in the polls, but yesterday, thanks to you, nearly two million Americans cast their votes for our
campaign.
[CHEERING AND APPLAUSE]
BLOOMBERG: This really is the best, most creative, most hard working campaign team ever assembled.
[15:05:11]
BLOOMBERG: And I have to say, there is no doubt in my mind, we wouldn't -- we would have beaten Donald Trump in November.
[CHEERING AND APPLAUSE]
BLOOMBERG: And you know who else knows that? Donald Trump.
[CHEERING AND APPLAUSE]
BLOOMBERG: He has been scared stiff of us and for good reason. Because every time he hit us, we hit back twice as hard.
[CHEERING AND APPLAUSE]
BLOOMBERG: And unlike his jabs, our punches packed the truth.
BLOOMBERG: Now, look today, I am clear-eyed about our overriding objective, and that is victory in November.
[CHEERING AND APPLAUSE]
BLOOMBERG: Not victory for me or our campaign, but victory for our country.
[CHEERING AND APPLAUSE]
BLOOMBERG: If you remember, I entered the race for President to defeat Donald Trump. And today, I am leaving the race for the same reason -- to
defeat Donald Trump because staying in would make it more difficult to achieve that goal.
I've always believed that data should inform our decisions. That's the way I ran my business and foundation and it's the way we ran City Hall.
In fact, our campaign slogan was in God we trust; everyone else bring data.
[CHEERING AND APPLAUSE]
BLOOMBERG: Well, after yesterday's results, the delegate math had become virtually impossible, and a viable path to the nomination just no longer
existed, and I will not be our party's nominee, but I will not walk away from the most important political fight of my life and I hope you won't
walk away either.
[CHEERING AND APPLAUSE]
BLOOMBERG: I've always believed -- I've always believed that defeating Donald Trump starts with uniting behind the candidate with the best shot to
do it.
And after yesterday's vote, it is clear, that candidate is my friend and a great American, Joe Biden.
I've known Joe for a very long time. I know his decency, his honesty, his commitment to the issues that are so important to our country, including
gun safety, healthcare, climate change, and good jobs, and I've had a chance to work with Joe on those issues over the years, especially when he
was Vice President.
He fought for working people his whole life, and I'm glad to say, I endorse Joe Biden, and I hope you will join me in working to make him the next
President of the United States of America.
[CHEERING AND APPLAUSE]
BLOOMBERG: It is an enormous understatement to say that I'm immensely proud of the campaign that we ran and the issues we raised and the sweeping
achievable plans we proposed, and that includes our Greenwood Initiative to write the right a historic wrong, to fight racial inequality, and make the
promise of equal opportunity real for the black communities that have enjoyed centuries of exploitation and discrimination.
That work I've always thought is fundamental to the future of our country, and to the more perfect union that each generation is called to build.
This afternoon, I want you to all know that I am grateful to everyone who supported us, to everyone in our campaign headquarters here in New York,
the work that you did every day, late at nights, early mornings and weekends and holidays was really just amazing.
And to our incredible staff and volunteers in the States, you knocked on more than two million doors and had more than 12 million conversations with
voters and to the traveling -- yes, you deserve a round of applause.
[CHEERING AND APPLAUSE]
BLOOMBERG: And to the traveling team from events to press, you made great events look easy. You made them look flawless, exciting and energizing.
You were the road warriors. Now, no one outworked all of you and that's for sure. I'm very proud --
QUEST: All right, Mike Bloomberg there. He said his important bit, he's endorsed Joe Biden and he has given the invitation that he's going to put
his formidable money behind Biden.
And after spending more than half a billion dollars on advertising, so it is over for this time and the performance as he admitted, he simply
couldn't get there.
He spent $570 million in advertising, which works out to just about $5 million for each day that the campaign ran and $63 million per delegate --
per delegate.
[15:10:08]
QUEST: Now, he is course, still a very wealthy man. He is worth about $60 billion, give or take. So just think, he spent $500 million. Just think at
the rate at which his wealth is being replenished to make up that amount. There is the difference between Mike Bloomberg and the average American.
Not average, is you sir.
ENTEN: Hello.
QUEST: All right, so what do we make? Mike Bloomberg out, Joe Biden, now the heir, presumptive for the nomination?
ENTEN: I think that's right. I mean --
QUEST: Except for Bernie Sanders.
ENTEN: Except for Bernie Sanders, but here's the deal. Joe Biden is in a very strong position, and now, he is going to get the money that he never
had.
Remember, Biden basically was running on fumes. Bloomberg was the one who took all that centrist money basically away from him. He went to the donors
and said, I'm your guy, now Bloomberg is behind him. Now, he has that money and we'll see if that impact is able to propel him past Bernie Sanders.
QUEST: All right. How does this play out now? What -- Super Tuesday is gone. What's next?
ENTEN: Yes, you know, there are a bunch of March contests that are next. And I think this is so important. Joe Biden, the big reason he did so well,
last night was African-American votes, and look at this, at least 20 percent of the primary voters were black in 2016; the upcoming March
contest, look at all of these states. Look at them.
These are all states that Joe Biden can do very, very well in.
QUEST: Okay, but these are -- these are states where, for example, blue collar.
ENTEN: Blue collar.
QUEST: So let's go, blue collar, Bernie Sanders, perhaps, blue collar, Joe Biden is popular in those states, but Bernie Sanders is, too.
ENTEN: The one thing that I will point out, look last night, look at these northern states that are very industrial -- Maine, Massachusetts, Minnesota
and Vermont. Vermont - Sanders' home state he won there, but the rest of them, Biden won or in Maine, he is leading right now, despite the fact of a
African-American percentage.
So I actually think that Biden can appeal to those white working class voters and do well in the north.
QUEST: All right, so why does -- do they have a problem with this particular voter?
ENTEN: Why -- why do Democrats have a problem with them? The reason -- I mean, here's the deal. Those regions have lost a lot of jobs, and we know
that they are not believing that the Democrats can bring those jobs back.
But I tell you, Joe Biden seems to have an appeal of white working class voters in a way that Hillary Clinton did not, and he seems to be able to
outperform what she did four years ago in the primaries, and it's going to be very interesting to me to see whether or not that transfers to the
General Election.
QUEST: Good to see you, sir.
ENTEN: Shalom and be well.
QUEST: Well, thank you, now. investors are sending a message that whilst Wall Street should be pleased, well, it's difficult to know exactly what it
means.
Good to see you, sir.
RUCHIR SHARMA, CHIEF GLOBAL STRATEGIST, MORGAN STANLEY: Good to see you, Richard.
QUEST: Thanks for joining me.
SHARMA: All right.
QUEST: And the -- Ruchir Sharma is with me, the Chief Global Strategist at Morgan Stanley, is this a Biden rally we're seeing in your view?
SHARMA: You know, we love to sort of connect the day's political news, with the day's markets movements, and I'm not sure that always is correct.
I'll tell you why.
Because if you look at all Wall Street private surveys of investors, for the last six months or so, they have made up their mind that Trump is
coming back. So about 80 to 90 percent of respondents keep saying that Trump is going to come back. So they never took, I think the Sanders threat
that seriously.
QUEST: So why are we up nearly a thousand points today?
SHARMA: Right. There's a lot of position adjustment going on in this market. This is the very market which got deeply oversold last Friday.
It was, in fact, the most oversold on many short term measures since possibly 2008. So that's the reason I think we're getting this very sharp
snap back in the market, and the sort of back and forth going on.
So this is, as you know, about 80 percent of trading on Wall Street now is done by quantitative kind of progress.
QUEST: Except at the beginning in the end.
SHARMA: Yes.
QUEST: So within this -- within these confines, the strategy. I mean, economies are going to weaken as a result of what we are seeing.
I want you to listen to what the IMF Managing Director told me earlier today.
(BEGIN VIDEO CLIP)
KRISTALINA GEORGIEVA, MANAGING DIRECTOR, IMF: Well, we are concerned and this is why this morning we had a call with our governing body representing
our 189 members, so we can discuss what we have learned in places that are ahead with this epidemic, and what is it that we can collectively in a
coordinated manner do?
Focusing on first, spending that boosts health systems; second, targeted fiscal measures to affected businesses and households. Understanding this
is both the supply and demand shock; and third, the IMF stepping up $50 billion made available for emergency assistance.
(END VIDEO CLIP)
[15:15:00]
QUEST: Market didn't rise, if any, it fell sharply with 50 basis points cuts by the Fed. What can the IMF do?
SHARMA: Well, not much really at this stage. And I think that that's what's really going on, which is that we are in a state where the global
economy this quarter is going to have its worst quarter since the global financial crisis of 2008.
All that we can do now is to look at what's happened in the past few episodes when such a global health emergency is taking place. What's
happened then typically is that you get a one quarter of a very sharp slowdown, but it typically tends to be okay in about six months' time. That
is roughly what has happened in the eight global health emergencies that have happened in post World War II history. That's the best we can say
here.
But the danger here is none of us, and I'm talking about investors, but even more epidemiologists do not know, what is the path of this virus at
this point in time? They have absolutely no certainty about that.
QUEST: So on the one hand, and on the other hand, what's the strategy you're employing?
SHARMA: Well, the strategy basically has to be, which is that this year is a washout as far as the global economy is concerned. It is going to be a
very weak economy.
But having said that, whenever you get such sharp, violent moves, like last time, it does make some sense to buy some, because this is a sort of very
extreme movement when markets fall 10 percent in a week, that doesn't happen too often.
But the long term picture is this, Richard, and this is one of the things we can speak about at length later, which is that the U.S. market is very
expensive.
It is today at 100-year high relative to the rest of the world. So what you have to do in these instances is take a slightly more long term view and
allocate more capital and buy more globally rather than buying the U.S.
QUEST: There's an entire argument against you. You've written a book, "The 10 rules of Successful Nations," you're coming back to talk about that,
when I'll put the arguments and you can defend your position, and we'll talk about that if I may.
SHARMA: All right, Richard.
QUEST: Good to see you, sir. Thank you very much.
SHARMA: Thanks, Richard. Thank you.
QUEST: I shouldn't be shaking hand, but we've got sanitizer on the way out. Don't worry about it.
SHARMA: Now, the E.U. says the coronavirus is a wakeup call for the European economy. Italy's former Prime Minister, who of course is the
Economics Commissioner, is with me after this break.
(COMMERCIAL BREAK)
[15:20:01]
QUEST: Italy is closing all schools and universities across the country as part of the efforts to contain coronavirus. The government says the
institutions will be shut down starting on Thursday and will last until March the 15th.
Italy has become the epicenter of the virus in Europe, 107 deaths and more than 3,000 cases. All of this disruption could hardly have come at a worse
time for the Italian economy, it's already on the brink of recession, and the government is struggling to get its debt under control.
Earlier, the former Italian Prime Minister told me why government action in Europe gives reason for optimism.
(BEGIN VIDEOTAPE)
PAOLO GENTILONI, FORMER ITALIAN PRIME MINISTER: I think that the fact that we are reacting in a coordinated way, even if we have different fiscal
policies, different budgets in member state of the Euro area is politically the reassuring effect to our citizens that we are ready to act
collectively.
By the way, this collective reaction is not only at European level. Yesterday, I took part to the conference call of the G-7 Finance Ministers
and Central Bankers, and today to the IMF.
I think it's very important that this multilateral commitment is showing now its strength to react to this coronavirus.
QUEST: At the end of the day, monetary policy is doing what it can. We've had widespread interest rate cuts and the E.C.B. will announce what it's
going to do next week.
Are you now calling our member states to ease the fiscal account, actually start spending, it's time for governments to start spending?
GENTILONI: Yes, our communique explicitly mentions, we are now asked to act also with tools of fiscal policy because it's obvious that the tools in
monetary policy, especially in Europe, are still there, but we can't accept the idea that monetary policy remains the only game in town, because it is
at its lower bound and we have to add to monetary tools -- fiscal tools.
And today, and this is very important, the Minister of Finance agreed on the fact that we will use fiscal policy measures in the next couple of
weeks to face this situation.
QUEST: I'll come to Italy in just a moment, but one final point just on this, why should we have confidence in European structures to deal with
this?
Europe has been calling for member states to reduce -- to increase fiscal spending for some time, but to no avail. Why should we now have any
confidence that European structures will handle this crisis any better than they did in 2008?
GENTILONI: Well, because of the crisis, because the crisis is a wakeup call for our coordinated fiscal policy, and because the lesson learned in
the 2008-2010 times and the fact that our system, especially the banking system, is much stronger than it was.
This lessons and this strength gave us the certainty that we will act. Crises are an opportunity to act. This is in the history of the European
Union, and I think it will be again in this moment.
(END VIDEOTAPE)
QUEST: The ramifications and repercussions of coronavirus are being seen throughout the financial world and it's being seen in the oil market where
we're seeing the biggest drop in oil demand.
Now remember, its demand and it's that fall in demand that's driving down prices in a market that's already facing oversupply.
If you talk about economic fundamentals, market fundamentals, it couldn't really be much worse. Now surprisingly, as OPEC meets on Thursday, the
group is under intense pressure to announce yet another round of production cuts. It still may not be enough to stabilize the market as CNN's John
Defterios explains.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR (voice over): The Ghawar Oil Field in Eastern Saudi Arabia is what helped build the Kingdom's
reputation as the world's number one exporter.
DEFTERIOS (on camera): This field was king of the castle if you will for decades, and it still produces nearly four million barrels a day.
But rising production in the United States, Norway and Brazil is making life more complicated for the OPEC Plus producers, and this was before the
coronavirus.
[15:25:04]
DEFTERIOS (voice over): It is a perfect storm that swept prices into bear market territory. It was the talk on the floor at this major energy
conference in Riyadh.
(BEGIN VIDEO CLIP)
LASZLO VARRO, CHIEF ECONOMIST, INTERNATIONAL ENERGY AGENCY: The coronavirus had a significant impact on oil demand, which is coming on top
of all of the abundantly supplied oil markets and growing non-OPEC production.
So this market impact is essentially mooted by both from the demand and the supply side.
(END VIDEO CLIP)
DEFTERIOS (voice over): How bad is it? The IAEA projects the first quarterly drop in demand since 2009 when the global financial crisis set
in.
After rising prices due to U.S.-Iran security tensions in early January, the international benchmark had lost close to $20.00 a barrel, with the
coronavirus emerging quickly and creating market havoc.
This collapse may in turn make the job of the de facto head of OPEC Plus, Saudi Arabia's Energy Minister, Abdulaziz bin Salman a bit easier, not
having to strong arm the other 22 producers, especially Russia to make deeper production cuts.
This has been imposed in part by China, the world's largest oil importer has already reduced shipments as growth stalls. Similar concerns plague
South Korea and Japan.
Here on the Arabian Peninsula, the national oil companies see the selloff in the same context as a decade ago, and again during 2016's oil price
collapse. They can weather the storm as the world's lowest cost producers.
(BEGIN VIDEO CLIP)
SULTAN AL JABER, GROUP CHIEF EXECUTIVE DIRECTOR, ABU DHABI NATIONAL OIL COMPANY: Our job at this point in time, at all times, is to stay very
agile and very resilient.
(END VIDEO CLIP)
DEFTERIOS (voice over): But due to high budget outlays in the broader Middle East, no one benefits from a market route like this.
John Defterios, CNN Business in the Ghawar Field of Saudi Arabia.
(END VIDEOTAPE)
QUEST: Now, before we take a break. News just in to CNN, Joe Biden is adding to his Super Tuesday victories. CNN is now projecting that he will
win the primary in Maine that edges out Bernie Sanders there. We're still waiting for the final results from California.
President Trump met with leaders of U.S. airlines confronting the potential collapse of the travel demand as coronavirus cases mount coast-to-coast.
We will have a travel special sort of, when we really do get to grips with all aspects of this, after the break.
[15:30:00]
RICHARD QUEST, CNN INTERNATIONAL HOST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. We're taking a closer look at
the devastating toll coronavirus is taking on the global travel industry. I'll be speaking to representatives from the airline cruise industries. And
as airlines report falling demand, we'll look at how travelers, you and me, how can we protect ourselves from the virus? And that also means not
getting stuck with tickets that we can't use. For that, this is CNN. And in this network, the facts always come faster.
Michael Bloomberg has dropped out of the 2020 democratic race and has endorsed Joe Biden. The decision follows Bloomberg's poor showing after
Super Tuesday primaries. Biden surged with big wins on Tuesday, including, as of now, also the State of Maine. Bernie Sanders is now Biden's main
challenger.
Italy is closing all schools until March 15th, as it tries to contain the spread of coronavirus. Speaking to me on QUEST MEANS BUSINESS, Italy's
former Prime Minister and current E.U. Economics Commissioner said, the government had Europe's back.
(BEGIN VIDEO CLIP)
PAOLO GENTILONI, EUROPEAN ECONOMICS COMMISSIONER, EUROPEAN UNION: I'm confident on the decisions of the Italian authorities. And today, among
European ministers, we showed full support to their decisions and also to the first financial package that the Italian government delivered to face
this crisis.
(END VIDEO CLIP)
QUEST: The release of the new James Bond film has been delayed. The filmmakers did not specifically mentioned coronavirus, but they did say the
decision followed an evaluation of the global theatrical marketplace. "No Time to Die," that's due to come out in April is now being pushed back to
November.
Greek riot police fired tear gas at hundreds of migrants, as they, once again, tried to cross the border from Turkey. Last week, Turkey said it
won't stop migrants crossing into Europe by land or sea. Since then, thousands of displaced Syrians have been trying to breach the border. The
E.U. says it will present an action plan to address the challenges faced by Greece.
So, the Dow, we are now over 1000 points. Remember two days ago, it went up over 1200 points, so up over four percent in the last 80 -- 28 minutes or
so. President Trump has, meanwhile, been meeting the heads of the major American carriers, to discuss containing the coronavirus and what they need
from the government. The airline executives explained, they are ramping up cleaning procedures and waving change fees for concerned customers. The
President highlighted domestic tourism at how it can help offset losses from canceled flights.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's affecting the airline business, as it would, and a lot of people are staying in our country and
they're shopping and using our hotels in this country. So, from that standpoint, I think, probably, there's a positive impact, but there's also
an impact on overseas travel, which will be fairly substantial.
(END VIDEO CLIP)
QUEST: Now, travel industry is in crisis mode. Tonight, we're going to explore the seriousness and some detail. We'll look at the key sectors and
economies that will be affected. And the questions that we need to be answered, about whether it's safe to travel, because this is an
unprecedented situation for an industry that's well-accustomed to crisis.
(BEGIN VIDEOTAPE)
QUEST: The travel industry has faced many shocks of different types before, but this is something different.
SCOTT SOLOMBRINO, EXECUTIVE DIRECTOR, GLOBAL BUSINESS TRAVEL ASSOCIATION: The last time I'm seeing anything close to this was post 9/11.
QUEST: It's the range and scale of industry that's truly worrying. Think about it, it's more than just planes and trains. It's the hotels where we
stay. The restaurants we dine at. The credit cards we use for expenses. Giant companies like Nestle and Unilever have restricted almost all
business travel, and massive trade shows like Mobile World Congress have been canceled, along with even travel trade shows, such as ITB. It's
creating a cascading threat to the travel industry and the millions of people who depend on it.
SOLOMBRINO: If there's nobody traveling on planes, there's nobody staying in hotels. If no one's staying in hotels, no one's going to restaurants. No
one's using taxi cabs, Uber, chauffeured cars, or anything else. Everything kind of stops, and that's the problem.
[15:35:03]
QUEST: This is what the impact of coronavirus looks like on Chinese air space. Busy routes, disappeared altogether at the height of the outbreak,
as travelers stayed home. Now, major European and transatlantic routes are also being canceled because of falling demand. I'm told IATA says it will
cost airlines more than $29 billion this year.
BRIAN SUMERS, SENIOR AVIATION BUSINESS EDITOR, SKIFT: It is not good. I'm talking to people who say that this is the worst crisis for airlines since
at least 2008, and maybe post 9/11. People right now don't want to travel.
QUEST: The cruise industry has been particularly hard hit. Last month, thousands of people were confined on board to cruise ships, amid fears of
spreading the virus. Coronavirus was detected on only one of the ships. There are fresh restrictions, as companies deny boarding to passengers
deemed at risk. Cruise line share prices have tumbled heavily. And some countries are turning ships away from ports that rely on the constant flow
of tourists.
So, look at the effects on some of the major players across the areas. Cruise lines, Carnival straight away down. United Airlines with all those
Asian routes out of the West Coast, also a big fall. And the largest hotel group in the world, Marriott have seen some very serious falls, down some
21 percent.
SOLOMBRINO: This is a new twist. It's the black swan that landed on your lawn. Nobody ever wants the black swan showing up but we had one show up.
But you know, the world is resilient. Humans are resilient. There's always a solution. It's just a matter of how much time is it going to take to find
the solution that's necessary.
QUEST: The travel and tourism industry is huge. It's estimated 10 percent of the global workforce is in some way connected to travel and tourism. So,
with all its vulnerabilities, the industry is worried but well-practiced at dealing with crises.
And with that in mind, Roger Dow is the President and CEO of the U.S. Travel Association and a good friend of this program. And Roger, I saw the
numbers suggesting us, you know, the latest survey suggesting a six percent fall in inbound for the U.S. What can you do to that -- about that to
mitigate?
ROGER DOW, PRESIDENT AND CEO, U.S. TRAVEL ASSOCIATION: Well, first of all, Richard, that was -- our numbers of our Travel Trends Index for three
months forward, six percent, it's going to be much worse. We just took those numbers a week or two ago, and the numbers we're getting right now is
much worse. What we can do, it's so important for us to get the all clear. The media, oftentimes, will talk about the problem, but we need everyone to
talk about the all clear. We're going to have to, as an industry, get together and really get people traveling again.
QUEST: How long is a piece of string, Roger? We don't know how long it's going to last in that sense. And there are so many particles (INAUDIBLE)
because, you know, as China may get back up and running again, Europe is now suffering. The U.S. is not disastrous on coronavirus, but it's this
uncertainty. How long are you looking at, do you think?
DOW: We're looking -- watching China, and China, the first three weeks, they had 4,000 cases. Next three weeks, they had 68,000 cases. Last three
weeks, 7,000. It seems to be going in the right direction, China. So, this is probably a three-month, four-month span. So, if you look at the U.S., I
think, hopefully, we'll see us come out of it in April. But we have so few cases, and the important thing is to listen to the health experts. There's
people that fear word is just getting people to do things that aren't even rational when you look at it, especially traveling in the U.S.
QUEST: I'm hearing stories of flights with three people in business class type of thing because so many companies have -- (INAUDIBLE) media have got
to travel restrictions in place. What would you say to those companies?
DOW: I would say those companies, listen to the experts. When you put travel restrictions on -- that are not based on any fact, you're really
causing a problem with people being able to buy your products. I'm so concerned with the travel industry, of the number of people that are going
to be out of work. And the people who are going to be out of work are the ones that really need these jobs, Richard. So, I would say, let's be smart.
Let's listen to the experts. There is no warning not to travel in the U.S. at this time.
QUEST: The awful part is, though, Roger, essentially, you're going to have to the industry, which I know it's easy and glib to say and I know there
are consequences to it, but if you take the macro picture, you're going to have to write off H1 at the first half of the year.
DOW: I think you're exactly right. This is going to be a bad quarter, but travel -- people put off and then rebook, so, we're going to have to come
out as an industry extraordinarily strong with -- there's going to be a lot of deals out there. If I have any advice for listeners, book your travel
now because there's a lot of deals out there. And when it recovers, they won't be there.
[15:40:12]
QUEST: That's exactly the point. That is exactly the point. Roger, sensible advice. Thank you very much.
DOW: Always a pleasure. Thanks, Richard.
QUEST: Now -- thank you. Now, let's get the overview. But perhaps no part of travel or tourism has been more affected than the cruise industry.
(INAUDIBLE) look at the share prices, you've only got to see the bookings. We'll talk about that. The cruise lines are now rolling out new screening
procedures. Will it be enough? The bargains are there.
(COMMERCIAL BREAK)
QUEST: The world's largest cruise lines are taking drastic measures to stop the spread of coronavirus if indeed it's there. (INAUDIBLE) companies will
deny boarding to passengers who have traveled from all through areas that are badly affected over the last two weeks. Now, that would include China,
Iran, South Korea, and parts of Italy. Passengers who've had contact with anyone known or suspected of having the virus will not be allowed on board
either. The cruise industry has been particularly badly hit by the outbreak, of course.
Look at the share prices. I mean, extraordinary shares of Carnival, Royal Caribbean, and Norwegian cruises, all of them heavily down. That's Royal
Caribbean, which is the worst, and Norwegian, I think is down some 44 percent.
Joining me now is Brian Salerno, Senior Vice President of Maritime Policy at Cruise Lines International Association, CLIA. Good to have you as
always, sir. Hi, I'm --
BRIAN SALERNO, SENIOR VICE PRESIDENT OF MARITIME POLICY, CRUISE LINES INTERNATIONAL ASSOCIATION: Good afternoon, Richard.
QUEST: On the -- on these new procedures, how are you going to enforce them?
SALERNO: Well, they're enforced by the cruise lines. Each of our members will do the screening along the criteria that you just articulated. Looking
at travel history, looking at contact with potentially infected persons or people who have confirmed to be infected, and also by symptoms as well.
There are a number of people passing through countries that are on the CDC list. You know, if they've been in those countries, they would
automatically be screened by the medical staff --
QUEST: Right.
SALERNO: -- on board the ship.
QUEST: And I presume they'll -- I presume they'll get a refund if they're found to be ineligible.
SALERNO: Well, many of the lines have relaxed to their -- you know, their canceling policies and have also, you know, worked out. You know, if
they're denied entry onto the ship, obviously, there's recourse there.
[15:45:08]
QUEST: For the industry, overall, same question that I asked Roger Dow -- you wouldn't have heard. But I asked Roger Dow of USTA, who you know well,
I'm sure. And it's this, essentially, you're going to have to write off the first half of this year.
SALERNO: Well, there have been economic effects as you just articulated, but we are, again, focused on the safety and the health of the passengers
that are still able to cruise. So that comes with a cost. We're willing to bear that cost in order to protect their health.
QUEST: The destruction of value of the -- of the cruise industry, as say in Norwegian and Royal Caribbean down some 44 percent. What can the industry
do to -- I mean, I suppose, arguably, you can say until the cows come home, that you're committed to safety. But what more can you do besides that, to
promote the industry after this is over?
SALERNO: Well, we are a resilient industry. We've had situations like this in the past, you know, global health issues that we've had to work through,
that they too had an effect. This is having an effect, you know, we're going through this together. We're confident that it is resilient enough
that when we finally get to the -- to the backside of this global problem, you know, that the industry will rebound.
QUEST: Right.
SALERNO: You know, the mean -- OK. In the meantime, you know, we are adjusting itineraries, minimizing risk to the extent possible, and even,
you know, repurposing ships. There's two, for example, that are doing humanitarian missions, just to use that capacity.
QUEST: And longer term, to get rid of the perception, not reality, that to put it crudely as you've seen that, you know, that a cruise ship as a
floating petri dish.
SALERNO: Well, we go to extraordinary measures to make sure that the ships are sanitized after every voyage. And also, during the voyage. If anybody
taking a cruise today would see staff members routinely cleaning areas where people can congregate on board, public use areas, cabins, and so
forth.
QUEST: Right.
SALERNO: There are extraordinary measures to limit any transmission of any illness of any type.
QUEST: And we're grateful, sir, that you're coming as always to talk to us now. It is appreciated, sir, thank you.
SALERNO: Happy to be here.
QUEST: Now, consumer demand for flying drops. Airlines are making it easier to change plans. The points guy is going to be with me after the break to
explain how we could all take advantage. Never waste a crisis, somebody said. Yeah. Well, we'll find out after the break.
(COMMERCIAL BREAK)
[15:50:00]
QUEST: Airlines have taken serious steps to tackle a coronavirus. Numerous carriers have waived their change fees. United Airlines has just announced
it will reduce global flights by 20 percent, next month. 20 percent. Additional screening measures have gone into effect for some routes. And
carriers are sanitizing their planes more often (INAUDIBLE) fogging. The industry is also proposing a dedicated app that can collect data, which
might be useful in the tackling of the virus. Staying at home isn't an option for many travelers.
These are becoming common sites on planes, hand sanitizers. Lots of people, of course, are wearing masks and lots of this. Joining me now is Brian
Kelly, founder of The Points. And good to see you, Brian.
BRIAN KELLY, FOUNDER, THEPOINTSGUY.COM: Thanks for having me.
QUEST: So, what should we be do -- what should we do when we are traveling because there's so much chaos come out.
KELLY: There is but I want to remind people that airports are, you know, especially in the U.S. are operating pretty much as normal now, but the
best thing to do is, you know, wash your hands. I actually have been pretty bad at it, but seriously, wiping down -- Alaska Airlines actually is now
giving people wipes.
QUEST: So, I have seen -- I was traveling recently, and of course, now everybody is doing this and then, you know, the tray table. Then wipe -- I
mean, is it worth doing all of that?
KELLY: It is. The experts say, you know, who knows who sat in the seat before you. The planes are not -- in between turns, you know, the airlines
turn those planes quickly.
QUEST: Right.
KELLY: So, the number one key is protect your own environment. You can't clean the whole plane but at least wipe down the area you're in.
QUEST: And what about the other flight -- I noticed the airlines are shifting ground on this. They're first of all saying that they want to keep
bookings up, so you can book and cancel all without change fee.
KELLY: Yeah. Delta has it now for any international flight through next February. So, it changes --
QUEST: But it's for new --
KELLY: For only for new bookings. So, if you --
QUEST: Yeah. But United (INAUDIBLE) shifted it slightly --
(CROSSTALK)
KELLY: They're changing by the day. Yes. And some of them are just to outbreak cities. Some are the whole country. I mean, the airlines should --
you know, Italy is at a level three CDC for Americans should not go there with, you know, unless essentially. The airline should be refunding -- if
you're a level-three country like Iran, South Korea --
QUEST: But if I meant to be going to another country and I just don't want to travel.
KELLY: Yes.
QUEST: I'm pretty much still out of luck there.
KELLY: You're pretty much out of luck, unless you had to cancel for any recent policy. But what I would tell people, even if you don't want to
travel, don't cancel if it's non-refundable. Wait, there could be a tornado that cancels that flight. So instead of just canceling and accruing the
loss, wait, because they're changing day by day. So don't panic --
QUEST: You can always cancel at the last possible minute, if necessary. One of the thing is -- let's look at the other side of this, there are some
tremendous bargains at the moment.
KELLY: There are.
QUEST: And ask for getting frequent flyer seats, suddenly they are safer seats are available like never before.
KELLY: We saw we -- at The Points, we just did a study and we -- there are 65 percent more availability for business class saver awards than there was
in January. So, for those people, especially there's so many countries that still don't even have an outbreak, especially in warmer climates. You know,
my take is live your life, you know, protect yourself as much as you can, but staying home does not guarantee that you're not going to get the virus.
QUEST: No. But, I mean, does it take a particularly brave type of person to decide to travel now?
KELLY: Well, I would highly recommend talk to your doctor. If you've got a respiratory issue, if you're older, you know, definitely take more
precautions, but the fact is --
QUEST: Don't look at me quite like that when you say if you're --
(LAUGHTER)
QUEST: It's my birthday on Monday. I --
KELLY: Mine is on Saturday.
QUEST: Oh, well, happy birthday. I'd shake hands but --
KELLY: But we're not allowed anymore. Oh, no, that's --
QUEST: That's all over my suit. Well, you can shake hands with my suit now. Good to see you.
(CROSSTALK)
KELLY: Good to see you, too, Richard.
QUEST: All right. Don't panic is the answer.
KELLY: Yeah.
QUEST: Good to see you. Thank you.
KELLY: Yeah.
QUEST: Last few minutes of trade on Wall Street. Biden bounce. Look at that. Well, as we were talking, it's gone up 1200 points or so. We've got
six minutes to go. We might even break the all-time points number. I've got The Points Guy next to me. Whenever somebody will tell me my -- if we
actually have or not. As for the markets gain, 11 percent United Healthcare Group.
[15:55:01]
That is simply -- that is absolutely the Bernie -- the Biden bounce because Bernie is looking less than trouble. Boeing is up half a percent. So,
everybody is up, some more than others obviously. Interesting state for the market. Now, to The Points Guy, and bargains galore. Would you like to take
one of these before you go?
KELLY: What are you trying to tell me? I'm dirty.
(LAUGHTER)
QUEST: We will -- okay. We will have a "PROFITABLE MOMENT" after the break
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT", the travel industry is in some sort of crisis. It is because of what's happening with coronavirus. The airlines
were profitable, making good money at one point, and then that's all drifted away, and now it's going to be extremely serious. Across the
industry, job losses. There will be layoffs. The routes are being canceled. You just heard me talk about what United Airlines is doing at the moment.
So far, in the last few weeks, I have been required to cancel a trip to San Paolo, a trip to Bahrain and I have other trips potentially to the -- to
the Gulf and to the Far East. Which ones will survive? I don't really know. Because, of course, there are corporate travel policies that now forbid
travel along with personal travel, where you're really quite asking, is it worth going? And at the same time, I'm getting e-mails from the carriers
and the airlines I've fly, telling me that there are great bargains to be had both on flights and on frequent flyer tickets, as Brian Kelly was
saying.
It's a really difficult conundrum for both industry and for traveling public. And with all that in mind, I suppose what it really comes down to
is good, old-fashioned common sense. You don't go to the most affected areas. When you do go somewhere, you use proper sort of precaution to keep
yourself safe. And if you have any doubt, you stay at home. This will come to an end, this crisis, in a matter of weeks, maybe a few months. And then,
of course, everything has to get back to normal, but for the travel industry, the damage that will have been done, the jobs that will have been
lost, the suffering that will have taken place, that will take some time before its put right. Safe travels if you're on the road.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Wherever and whatever you're up to in the hours ahead, I hope it is
profitable. There we go, over 27,000.
END
